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World Bank Provide US$ 55,25 Million to Develop Energy Infrastructure in Indonesia

by Sebastianus EpifanyMonday, February 13, 2017 - 10:55

WASHINGTON - The World Bank ensure will providing grants for energy infrastructure development in Indonesia. This was confirmed after the World Bank Executive Board approved a grant of US$ 55,25 million to support Geothermal Energy Upstream Development projects, which aims to facilitate geothermal power plants investment.

Geothermal power is the second largest renewable energy source in Indonesia's after hydropower and it can be an alternative clean energy source for the coal power plants.

This grant has two components with different purposes. The first component is a Clean Technology Fund (CTF) which contributed US$ 49 million to support infrastructure development and drilling exploration.

The second component, the Global Environment Facility (GEF) contributed US$ 6,25 million to support technical assistance aimed at increasing capacity related to geothermal exploration, including the implementation of protective measures (safeguards due diligence). Indonesian Finance Ministry and PT. Sarana Multi Infrastruktur, a State Owned Enterprises infrastructure funding, will fund this project with the same amount of funding from the CTF.

"Lack of electricity inhibits the potential growth of Indonesia and limit the future opportunities for the millions of Indonesian people. The grant will help to develop the huge potential of Indonesia's geothermal," said Rodrigo Chaves, World Bank Country Director in Indonesia, as reported from Pressrelease.id (13/2/2017).

He added, "The World Bank supports the government's efforts to achieve 100 percent electricity access to modern and reliable as quickly as possible."

Geothermal Energy of Upstream Development Project will also support Indonesia's efforts to switch to more environmentally friendly energy and achieve the goals of Indonesia in 2025, which is the portion of renewable energy in the primary energy mix rose to 23 percent.

World Bank Senior Energy Specialist, Peter Johansen explains, "This project gives special emphasis to the eastern part of Indonesia, which has much higher percentage of families without a modern and reliable electricity."

World Bank support to develop geothermal power in Indonesia is an important component of the Framework Partnership Countries of World Bank Group in Indonesia. The framework gives emphasis to the priorities of Indonesia that could impact a big change.